Argentina government aims to undershoot inflation forecasts in December

Argentina government aims to undershoot inflation forecasts in December

By Hernan Nessi

BUENOS AIRES (Reuters) – Argentinas inflation is expected to rise 5.2% in December, according to the median response from a Reuters poll of analysts, though the government is hoping to beat that and keep the consumer price increase below 5% in the last month of 2022.

The South American country is battling rampant inflation which is set to end the year at around 95.5%, one of the highest levels in the world. The soaring prices badly hurt growth and hit peoples salaries and spending power.

In a recent interview, Economy Minister Sergio Massa said monthly inflation would not exceed 5% in December and noted the objective was for it to stand at around 3% in April.

However, estimates from 19 local and foreign analysts showed a slightly higher rise in the consumer price index for the late month of 2022, with projections ranging from 4.9% to 6.3%.

Argentinas official statistics agency will publish December inflation data on Thursday afternoon.

Prices of fruits and vegetables were showing an upward trend during the month, while meat price rises slowed, according to Lucio Garay Mendez, economist at consultancy EcoGo.

Economists expect monthly inflation to remain around 5% for the start of 2023, driven by an economic slowdown and price cap agreements on retail products.

“But risks remain elevated, and the shortage of (U.S.) dollars may translate into a further escalation of parallel (market) dollars, leading to higher inflation,” said Isaias Marini, an economist at consultancy Econviews.